MCALLEN, Texas - Ralph Garcia, COO of McAllen Economic Development Corporation, did not plan to have a speaking role at a recent Council for South Texas Economic Progress event.
The meeting, held at the Cambria Hotel in McAllen, was part of a tour COSTEP had organized for representatives in the automotive manufacturing and supply industry in San Luis Potosí. One of the agenda items was a panel discussion involving economic development leaders from Mission, Laredo, Edinburg and Elsa.
Garcia was in the audience but he was asked to speak by the panel moderator, Rick Carrera. COSTEP’s economic development director thought it would be good for the auto industry representatives from San Luis Potosi to hear about a project by French tech company Valeo to build a $225 million manufacturing plant in McAllen. The plant will produce computers for General Motors vehicles. McAllen EDC played a big role in landing the project.
Garcia said:
“Over the last 30 years, we have focused on bringing industrial investment to the area. Back then, our region wasn't a popular spot for investment; companies were leaving for other parts of the state. Our focus at the time was attracting investment to Tamaulipas—specifically Reynosa. We brought in companies from all over the world, with the automotive sector being among the first.
“We have companies like Tensolite in Río Bravo—which was mentioned earlier—producing seatbelts, as well as various other automotive firms.
“We know that this year, the USMCA is up for review—I believe that will be discussed in a few minutes—and the automotive sector is assessing how these changes and upcoming reviews will affect them. We know certain companies are looking for options to continue operating in Mexico while also operating in the United States.
“Our communities in the region are ready to support any company trying to figure out how to maintain operations in Mexico or considering moving specific production lines to the United States. We are available to have those conversations.
“We did this with the Valeo investment; they were looking to expand their Río Bravo operation and open another plant in Querétaro. When Trump became president, the dynamic shifted, and the focus turned to the United States. The product involved—a vehicle component—entailed labor costs of around $80 an hour. That is significant because the automotive sector in Mexico differs greatly from that of the United States, and costs vary drastically.
“Therefore, it has to be a product with sufficient margins to make U.S.-based production viable, while also fitting the company's operational dynamics and ability to serve its customers. We (economic development organizations in the Rio Grande Valley) are all available to support them in that regard.”
Editor’s Note: Here is a video recording of Garcia’s remarks, which were made in Spanish:
